BLOODHOUNDBLOG.COM

There’s always something to howl about

A radically different way of thinking about real estate: What if Las Vegas Boulevard were private property . . . ?

For Galen Ward from Rain City Guide, here is a weblog post I wrote in 2003 on the idea of mass transit and private property in Las Vegas. The Las Vegas Monorail was then still in construction, and I was busily demonstrating why it must fail — which it has, as the ultimate slow-motion train wreck. Much has changed since I wrote this (and the links are not warranted to work): The Mandalay Resort Group has been swallowed by MGM/Mirage, the Boardwalk is in redevelopment and the Stardust is about to be. There are semi-residential towers being built on The Strip — although there still will be no commuters living there. Most importantly, the PediCabs, the bicycle-rickshaws, have been banned. Public pretext: Safety issues. Real reason: Too effective at competing with taxicabs.

Anyway, using Las Vegas Boulevard as an example, here is a completely different way of thinking about real estate:

BetterVegas: No-train-ware…

Harkening back to this, deconstructing boneheadedness is simply a matter of determining how and why the solution deployed did nothing — or less than enough, at least — to satisfy the original objective. It is boneheaded not to connect the resort with the casino that is its reason for being. It is boneheaded to turn an entertainment venue into a regimented drill, then move the patrons though an inane non-exit. It is boneheaded to build a trolley system in Phoenix that will not empty a single car, but which will cause those cars to move slower and pollute more.

It is boneheaded to build a transit system for The Las Vegas Strip that is not on The Strip. But what’s worse, it would be boneheaded to build a rapid transit system even on The Strip.

Why is that so?

The answer comes in the form of two more questions: What is the product? And who is the client?

The Strip runs on Las Vegas Boulevard from Sahara Avenue to the north to Russell Road to the south. When we think of mass transit systems, we think of commuters. In this we are being thoughtless, because on that four-plus mile stretch of road there are zero commuters. No residential housing. No full-time residents. No one rushing off to the office in the morning. No one racing home to dinner in the evening. No commuters, period.

The Strip needs a transit system because four miles is a long, long way to walk in the desert heat, particularly after you’ve walked a few gargantuan casino floors. But The Strip does not need a rapid transit system. Rather more the opposite, since visitors come to gawk at all the spectacles. What The Strip needs is a way to get where you want to go without walking, when you choose. That’s all. Not maglevs or monorails or trolleys or subways from Back East or the Far East. Those bicycle-rickshaws would be more than adequate, if there were enough of them, and if there were space enough for them to operate. I want a good deal more than that, but the essential thing to understand is that a big, fast, capital-intensive, fixed-station rapid transit system — while it might be a tax-dollar-devouring convenience for commuters — is a thoughtless mistake for Las Vegas Boulevard. It’s boneheaded, even on the right route, because it delivers the wrong product to a client base that does not even exist on The Strip.

We are thoughtless, as a species, just about all of the time. We hear ‘transit system’ and we automatically think of structures and vehicles and stations and tickets and cops, all the things that a municipal rapid transit system must have. And if we decide to connect two buildings, we envision a corridor, a vast, empty squared-off tube interrupted occasionally by grim little windows. One of the lessons Las Vegas is teaching us, not as quickly as it might, is that a corridor connecting two buildings can look and feel — and generate profits — like a shopping mall, if you build it right. Right now, the Mandalay Resort Group is in the process of replacing the first type of corridor, connecting Mandalay Bay with the Luxor, with the second type. This is the thoughtful approach to the problem. The transportation problem, yes, point A to point B. But the profitability problem, too, and Mandalay has proved itself to be inspired when it comes to solving the profitability problem.

So, if we resolve to be thoughtful, we can ask ourselves this question: What is Las Vegas Boulevard? Remember to think outside the corridor! Streets and roads have been government monopolies since before the Boston Post Road, since before the King’s Peace of bloody Prince John, since before the cobbled roads trod by the Roman Legionnaires. In all that time a road like Las Vegas Boulevard has been a flat surface at or near the grade of the Earth set aside for feet, hooves and wheeled vehicles. In recent times, roads have served as rights-of-way for water, sewer, power and communication lines, but this is the extent of their flexibility. Ultimately, for now, roads are for cars, with pedestrians suffered grudgingly.

This is thoughtless. A road is real estate, with the dichotomy between ‘street’ and ‘structure’ being entirely imaginary and entirely unnecessary. We make this distinction because we stupidly gave the government the power to build roads, and because the government has built roads stupidly ever since. This was a profoundly boneheaded thing to have done, but even if we all resolved, unanimously and permanently, never to be this thoughtless again, it would still take a long, long, time to undo the consequences of failing to understand that roads are real estate, that a corridor can be more than a tube.

I have three distinct ideas for solving the transportation problem on Las Vegas Boulevard, but before I detail them, I want to take a moment to talk about constituencies. In an actual free market, which the United States is not, there are only two parties to a real estate transaction, either the seller and the buyer or the landlord and the tenant. But because Clark County, Nevada, is a government, resolving disputes by force instead of reason, there are two sets of technically uninvolved hitchhikers to any proposed transaction: The government itself, and other parties who can sway the government to use its coercive powers to promote or prevent that transaction. In the case of The Strip, the Other Parties, primarily, are the casino properties, and it is their perceived self-interest that will tip the balance for or against anything I or anyone else might propose.

That’s important, because any particular casino doesn’t actually want for you to have a convenient way to get from its property to another. This is why it’s so hard to find the doors. On the other hand, once you have escaped from one casino, each of the others wants for it to be as easy as possible for you to wander into their facility, with luck never to emerge. The Nowhere Train is boneheaded, but there is a logic to its boneheadedness: It buttresses the competitive appeal of the Las Vegas Convention Center and the Sands Expo Convention Center, at the expense of the Mandalay Bay Convention Center; it delivers conventioneers from the north end of The Strip to hotels further south; and, as pure gravy, it drives every potential passenger all the way through the casino floor at either end of the trip.

From Clark County’s point of view — from the point of view of the tax collector and also of The Las Vegas Convention and Visitors Authority — the most valuable real estate in Nevada is not the land fronting on Las Vegas Boulevard, but The Strip itself. At present it doesn’t generate any tax revenue in se, but it is the sine qua non of all the tax dollars produced by Strip properties. But the street itself is eminently exploitable as taxable real-estate, lacking only vision and capital to make it even more profitable, per square foot of grade-level dirt, than the Bellagio or the MGM Grand.

I’m talking about privatizing The Strip, of course, and developing it as taxable real estate — turning it into more than a corridor. The three proposals I’m offering here can be ranked according to capital cost, construction intrusiveness, profit potential and, ultimately, political inviability. I’ll start with the best and least likely.

I. The Meadows

If the ‘public’ part of Las Vegas Boulevard is 75 feet wide, on average, then the four mile length of The Strip is over 1.5 million square feet of dirt at grade level. This is not a lot of land by Strip standards, but we’re going to build edge-to-edge, where Strip properties, to date, have been very wasteful of their acreage. Moreover, the government’s tax-coerced ‘free’ roads induce us, thoughtlessly, to think horizontally, when all the real money in real estate comes from thinking vertically. The project I call The Meadows (the words ‘las vegas’ in English and the name of the very first Las Vegas casino resort hotel) is designed to be extremely vertical. In passing, this idea is not contingent on the sale of Las Vegas Boulevard; there are several prime pieces of property on The Strip where it would work. We’re putting it on The Strip for the sake of discussion.

So, level by level, from the excavation straight to the top: First the street, the right of way for all those cars now clogging Las Vegas Boulevard, stuck way below grade level. We can’t get the cars off The Strip, since the hotels are all essentially motels, but we can get them out of the way. To do this we’re going to have to rip up everything, which will be hugely intrusive, but the upside is that everything now below the street surface will be replaced with new hardware, all of it accessible without future intrusions. Above the street, still below grade level, comes parking, lots of it.

Above that, at grade level, is a huge park, a true boulevard, a four-mile walkway enclosed in glass and air-conditioned, with the ceiling so high that the fenestration is virtually unimpaired. Here we can put the bicycle-rickshaws or perhaps very slow slidewalks running down the middle. Borrowing a page from The Fremont Street Experience, street vendors can create a safe and sanitary pretend-Mardi Gras, this in contrast to Fremont Street.

This park, this better-boulevard, provides street-level access to all the casino properties on both sides of Las Vegas Boulevard, but above that is the real money: A casino within the property, as much as the traffic can bear, up to the full length of the property or interspersed by retail like The Fashion Outlet Mall at the Primm Valley Resort and Casino. The fact is, the casino can take up more than one level, in time, if business warrants that. And above that is retail, four miles of it. This can be multi-level, too, of course, and it can link by walkway to existing Strip shopping centers.

And above all that is another park, this one outdoors. What we might think of as the roof level serves as building pads for skyscrapers: Hotels, office buildings, residential towers, time-shares, vertical strip-malls even. Pools and tennis courts, and, at the edges, an incomparable view of The Strip.

The business of The Meadows is businesses — other people’s businesses. Everything but the street and the connecting common spaces can be owned and run by other companies. This is not a new idea. It is Charles Keating’s Master-Planned Community concept expressed vertically. So we have parking concessions, as many as make sense, grade-level vendors and rickshaw-jockeys, casinos, as many as make sense, massive quantities of retail stores, and, above all that, real estate development in the large. The Meadows Incorporated is in the business of creating and selling or leasing real estate market opportunities.

This would solve the transportation problem, and a whole lot of other dilemmas. It would be hugely profitable and hugely beneficial to the taxing authorities. It is also extremely unlikely to be built in this form, since all of the casino properties fronting on The Strip would oppose it. Frankly, an idea like this would be much more viable on an immense piece of privately-held land, like the Stardust, the Boardwalk or the golf course at Wynn Las Vegas.

II. Mardi Gras (curribus vale, farewell to cars)

This is a much simpler approach, but it would have to be subsidized by casino resort hotel properties, since there is not enough profit-potential here to justify a separate business. What we do is rip up Las Vegas Boulevard as above and submerge the automobile traffic. At grade level is the park and walkway described above. I would like for it to be enclosed in glass and air-conditioned, but we are now at the cheap-it-out level of investment, so that may be asking for too much. As above, we can have a continuous pretend-Mardi Gras, dancing in the street. To take the sting off the intrusiveness of ripping up all of Las Vegas Boulevard, the participating resorts will get all new infrastructure hardware, designed, one would hope, in such a way that repairs are fast, easy and cheap. The enduring curse of government ownership of the roads is that legislators and their contractor brothers-in-law have no incentive to install subsurface improvements in a maintenance-friendly fashion.

III. Up On The Roof

This is the cheapest solution of all. It consists of a pedestrian deck built over the grade-level automobile traffic, sidewalk-to-sidewalk, four miles long. Again, the park, the walkway — one would hope enclosed in glass and air-conditioned. Setback properties, like Bally’s, could build connecting ramps or slidewalks. Others, like New York-New York, could use second-floor walkways, just as they do now with the elevated sidewalks.

Conclusion

All of these proposals separate the pedestrians from the automobiles, and that’s no accident — no pun intended. Las Vegas Boulevard is walkable in principal, weather permitting, but vehicular and foot traffic don’t mix happily. The mass transportation problem on The Strip, to the extent there is one, can be solved easily — and cheaply — if the space available to entrepreneurs like the bicycle-rickshaw vendors is increased. Surely it would be possible to build a slidewalk system, but that’s a big investment with a fairly lousy mean-time-between-failures. In any case, putting the cars and the pedestrians on different levels will solve most of the problem while creating market opportunities from tiny to immense.

Related posts:
  • What’s the hottest game in Vegas? Strip Monopoly!
  • Taking the Plunge as a Real Estate Broker/Owner
  • Clip show: Vegas Vacation

  • 1 comment

    1 Comment so far

    1. Galen November 1st, 2006 5:43 pm

      What a post! Here here! Bury the roads!